Walker Sands' Future of Retail Study reveals product rental instead of purchase among consumers is on the rise, expected to grow by 70 percent in the next year.
CHICAGO – December 4, 2013 – Consumers – especially the younger generation – are looking to crowdsourcing to rent products instead of making purchases. According to Walker Sands' 2014 Future of Retail Study, 37 percent of consumers ages 18-25 have already participated in renting instead of buying, with 63 percent open to renting instead of buying in the next year.
The 2014 study from Walker Sands, a public relations and digital agency for technology companies and startups, revealed that 27 percent of overall consumers have rented a product instead of purchasing it in the past year and 56 percent would be open to it in 2014.
Younger consumers lead the trend. Those ages 18-25 are 90 percent more likely to have participated in renting instead of buying compared to those over the age of 60:
Millennials are most likely to have rented books (25 percent have done so) and consumer electronics (12 percent have done so). Comparatively, only 9 percent of those over the age of 61 have rented books and only 6 percent have rented consumer electronics, representing a major curve in willingness to rent these items across generations.
"Renting instead of buying is seeing tremendous overall growth, but it's the younger generations that are adopting it at much faster rates," said Tory Patrick, account director and lead of the retail technology practice at Walker Sands. "Retailers must invest in ways to work with this trend as younger generations continue to shift the traditional retail landscape."
Books (16 percent of consumers have rented) and consumer electronics (8 percent of consumers have rented) are currently seeing the highest percentage of rentals, but luxury, sporting good and tool rentals are likely to grow exponentially in the next year.
Consumers ages 18-25 are the most likely to have rented all kinds of products in the last year, other than tools, for which those ages 26-35 and over the age of 60 are most likely to have rented.
"Just as we've seen e-commerce growth vary across industries, we're starting to see the same trend with product rental," added Patrick. "What's interesting is how open to rental most consumers are for a variety of products, even if they haven't rented products in the past. This is especially interesting with luxury goods, since many customers aren't comfortable purchasing those items online. Retailers and technology companies such as Rent the Runway and Eleven James have figured out a way to leverage this trend early to be extremely successful with the next generation of consumers."
Most generations have rented in the past year instead of buying because they didn't have a use for the item afterwards, but Millennials report renting specifically to save money and because they wanted to try a new service.
The study also suggests that customers who are frustrated with the return process may be driven to rent at higher rates in the next few years. Seventy-six percent of consumers report purchasing a product online that didn't meet expectations, but of those dissatisfied customers, only 59 percent said they returned the item.
"Overall, the widest gap in rental tendencies among generations is their reason for doing so, and businesses need to keep their audience in mind when creating rental strategies, paying close attention to younger generations looking to try new services," added Patrick. "The data also demonstrates that retailers who allow for easy returns may see lower overall levels of abandonment for rental in their revenue."
To view the full results of the 2014 Future of Retail Study, visit www.walkersands.com/futureofretail.
The Walker Sands' 2014 Future of Retail Study surveyed 1,046 consumers across the United States on their spending behaviors in the past year and preferences for future spending. The survey analyzed consumer behavior and preferences for making purchases online and in store with mobile devices and other technology. Responses were broken down by demographics, including income and gender, among other factors.
Walker Sands works with a variety of retail technology companies. Similar research is often assembled for these clients through the Walker Sands analytics team.
About Walker Sands
Walker Sands is a full-service marketing and public relations firm specializing in media relations for technology companies ranging from startups to enterprise level. With offices in Chicago and San Francisco, Walker Sands was founded in 2001 to provide data-driven marketing support for a wide array of companies with the business mission of providing best-in-class communications counsel and services. In 2013, Walker Sands has received recognition for client work from the PRSA Skylines, Hermes, PCC and PR Daily awards, among others. To learn more, visit the Walker Sands website.